In the Pipeline: 6/16/11

Even a blind squirrel finds a nut every once in a while – LA Times Editorial Board comes out hard against ethanol Los Angeles Times (6/15/11) reports: It isn’t too often that Sen. Dianne Feinstein, a pro-environment Democrat from California, and Sen. Tom Coburn, a “drill, baby, drill” Republican from Oklahoma, agree on energy issues. Yet when it comes to the ethanol tax credit, an egregious form of corporate welfare that unites liberals and conservatives in opposition nationwide, they are of one mind. That’s why it was disheartening Tuesday when an attempt to end the subsidy and save taxpayers nearly $6 billion a year went down in flames in the Senate…Opinions vary about whether corn-based ethanol is a worthwhile alternative fuel. Backers, including President Obama, say it reduces reliance on foreign oil and cuts greenhouse gas emissions. Yet it has a host of negative consequences. The U.S. diverts about 38% of its corn crop to make biofuels, raising food prices around the world and encouraging overuse of environmentally destructive fertilizers. Cellulosic ethanol, made from plant waste or non-food plants such as switchgrass, is a far better alternative, but the technology to produce it inexpensively isn’t ready.

Greenies want to switch out OPEC for Red China — Mr. President, those shovel-ready green jobs will have to wait…your green friends won’t let us mine in the U.S. Recharge News (6/15/11) reports: Ming Yang says the agreement with Ganzhou, the second-largest city in China’s Jiangxi province, makes it the first Chinese wind group to gain such access to the key raw materials used in permanent-magnet generators (PMGs) for turbines…Ganzhou has granted Ming Yang the right to be its leading partner in Ganzhou Rare Earth Mineral Industry Group, a state-owned company formed by the municipal government that enjoys rare-earth resources development rights in eight counties…Ming Yang says it will invest in rare-earth research and development projects, and the production of core components such as PMGs…The framework agreement also gives Ming Yang exclusive rights to operate wind farms in the area and grants priority status to the manufacturer’s turbines in Jiangxi province, according to the company… “Building a wind-power upstream supply chain is a core part of Ming Yang’s strategic development,” says chairman and chief executive Zhang Chuanwei.

Washington Times calls out T. Boondoggle Pickens for wanting to pass gas in public with no shame Washington Times (6/15/11) reports: Congress is considering the NAT GAS Act (H.R. 1380), which would provide very generous tax credits – as much as $64,000 per vehicle – to those who retrofit trucks to run on natural gas. This legislation, the brainchild of hedge fund-operator and sometimes oil- and gasman T. Boone Pickens, is deeply flawed and would damage consumers, farmers and manufacturers…How would it do this damage? The legislation is specifically designed to increase demand for natural gas in the transportation sector. This artificially enhanced and government-driven demand will, in turn, increase the cost of natural gas for those who use it to heat their homes, use electricity generated from natural gas or use natural gas for chemicals and fertilizers…Worse, the effects of H.R. 1380 will be magnified because they will appear at the same time as the unprecedented, cumulative effect of the ongoing coal-to-natural-gas fuel switch in the power-generation sector, driven mostly by environmental regulations. They also will coincide with similar fuel-switching by the industrial sector, driven primarily by the Environmental Protection Agency’s (EPA) recently issued regulations on maximum achievable control technology for industrial boilers. The cost effects will even be magnified by Department of Energy-approved exports of liquefied natural gas from Louisiana and Texas to China and the European Union…Taken together, these policy actions will significantly drive up demand and price for both natural gas and electricity for the entire country – hardly a prescription our ailing economy needs.

With friends like these… Obama praises Romney on health care. Al Gore praises him on his global warming stance. What’s next, an endorsement from Bill Clinton for his family values?National Journal (6/16/11) reports: Gore praises Romney on Climate. First Obama praised Mitt Romney on health care. Now, in another turn that’s sure to chagrin the Republican front-runner, the Goracle is praising him for sticking to his principles (aka, science) on climate change. On his blog, the former vice president and Nobel Peace Prize winner writes, “Good for Mitt Romney — though we’ve long passed the point where weak lip-service is enough on the Climate Crisis. While other Republicans are running from the truth, he is sticking to his guns in the face of the anti-science wing of the Republican Party.”

From time to time, the obvious needs to be said — IEA says high energy costs will lead to economic hardship Wall Street Journal (6/16/11) reports: The continuing high price of crude oil risks creating a hard landing for the world economy, the International Energy Agency’s Executive Director Nobuo Tanaka said Thursday…Addressing a briefing at the start of the St. Petersburg International Economic Forum, Mr. Tanaka said: “If the current oil price continues it will be to the detriment of the global economic recovery.” The current situation “is starting to resemble 2008, and we know that 2008 was a very hard landing for the world economy. We’d prefer a soft landing,” he said…The IEA is still monitoring the global oil-supply situation in the wake of this month’s fractious meeting of the Organization of Petroleum Exporting Countries, Mr. Tanaka said, against a background of evidence showing that the world needs more oil from OPEC, which controls around a third of the globe’s production and is home to almost all of the world’s spare production capacity…OPEC’s ministers last week refused to endorse a group-wide increase in output to take the edge off crude prices, to the frustration of its largest producer, Saudi Arabia. Saudi Arabia also has the bulk of OPEC’s spare capacity…Earlier in the briefing, David Fyfe, head of the IEA’s oil-markets division, said that current prices for crude oil don’t reflect any degree of “excessive speculation,” but rather reflected a genuine tightening in the world market.


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